Finance minister Keit Pentus-Rosimannus (Reform) has called on state energy firm Eesti Energia to halt development of an oil shale plant, following both a legal ruling to that effect earlier this month, on environmental grounds, and questions raised over the proposed facility's potential profitability.
"In a letter sent to the management of Eesti Energia, I have also considered it necessary for Eesti Energia's supervisory and management boards to review and update the profitability calculations of the new oil plant, taking into account various forecasts and circumstances arising from climate agreements and litigation," Pentus-Rosimannus said, adding that the costs-benefits analysis at planning stage found the proposed Enefit 280 plant to have potential to be financially viable.
Tartu circuit court suspended Eesti Energia's building permit at the beginning of May. The development had been the focus of Fridays for Future Estonia, an organization of young Estonian climate activists, who have sought its scrapping on environmental grounds.
The development zone includes the Mustajõgi area, part of the EU's Natura 2000 network of protected areas, whose species include drooping woodreed (Cinna latifolia), a rare type of grass.
The court found that based on environmental assessments, it cannot be said for certain that going ahead with the oil shale planet would have no impact on the surrounding natural habitat and that more analysis was needed.
Eesti Energia spokesperson Priit Luts confirmed to ERR that construction work had been halted – ie. had not started – due to the injunction, adding that the company was also providing its own analysis.
Luts said that: "We have submitted additional expert assessments to the court to help the judge make a considered and fact-based decision regarding the building permit."
"The preparation for the plant's construction is still in its preparatory phase and the focus is on activities which do not require on-site delivery," Luts went on, saying the proposed plant was of significant value to the state.
Luts also said that the plant would fulfill green energy goals in moving away from traditional oil shale production and use.
"Eesti Energia must gradually move from oil production to oil and electricity co-generation, which is more environmentally friendly and efficient than direct burning of oil shale. By building a new oil plant and closing older power plants, Eesti Energia has fulfilled exactly this expectation," Luts added.
The winding up of the sector fits in with long-term EU climate neutrality goals.
While the permission to build was halted in early may, Social Democratic Party (SDE) MP Jevgeni Ossinovski has since approached Pentus-Rosimannus with questions about the costs of construction and potential profitability once it was up-and-running.
The finance minister said that since the validity of the building permits had been temporarily suspended, the company should not in the interests of its own financial results incur further expenses in the planning and construction of the plant while the disputes were ongoing.
Priit Luts of Eesti Energia said that the firm, too, had reviewed the profitability calculations with various scenarios, adding these confirmed the profitability of the proposed facility.
Former prime minister, Jüri Ratas (Center), said earlier Wednesday that going ahead with the plant was necessary in order to bring jobs to Ida-Viru County at a time when the oil shale sector as a whole is in decline.
Editor: Andrew Whyte